Associated British Foods is to build a £200m biofuel plant in Saltend, Hull.

The plant, which is scheduled to be completed by late 2009, will be run as part of a joint venture between Associated British Foods, BP and DuPont. Its capacity will be 420 million litres of bioethanol per year.

The plant will initially produce bioethanol but Associated British Foods will also look at the feasibility of converting it to biobutanol once the technology is available.

“The exciting project will make Associated British Foods the major producer of biofuel in the UK,” said Associated British Foods chief executive George Weston.

“It reflects our confidence in our sugar and agricultural businesses, in our partners BP and DuPont and in the government's commitment to biofuel production,” he added.